2022 PLP 775 (CLD)

OMAR SIAL, J.

This Criminal Original Miscellaneous Application (which was a complaint under sections 83(1) and (1-A) read with section 84 of the Banking Companies Ordinance, 1962) was filed in the year 1999 by the State Bank of Pakistan against Bankers Equity Limited (BEL, which has since been liquidated) and 3 of its officers, namely, Rauf Bux Qadri, Inamul Haq and Ashfaq Yousuf Tola. BEL and its officers were accused of misreporting to the SBP in connection with its liquidity.

2. The Application was first heard on 7-9-1999 when this Court was of the view that a triable case had been made out and thus bailable warrants were issued against the three officers of BEL. At that stage, the three accused were ostensibly in FIA's custody in some other cases, thus on 14-9-1999 FIA was directed to produce the three before this Court. On 17-9-1999 the three accused were produced in Court and the Court was informed that they had obtained bail in this case. On 8-10-1999 it was ordered by this Court that the requisite papers upon which SBP had based its case be provided to the accused so that a charge could be framed. It was not until 24-1-01 when copies of documents were supplied to the accused and it was ordered that a charge be framed on 20-2-01. For one reason or the other, the charge was not framed and in the year 2005, the application under section 561-A, Cr.P.C. (M.A. No. 3965 of 2005) was filed by Mr. Ashfaq Yousuf Tola for quashing proceedings against the accused. Somewhere in the year 2006, Rauf Kadri left the country and did not return hence the charge could not be framed. In the year 2018, accused Inam-ul-Haque was exempted from his personal appearance on account of his old age and feeble health. The charge has not been framed till today nor has M.A. No. 3965 of 2005 decided. This order will dispose of the said application.

3. BEL was a public limited company, admittedly falling within the regulatory responsibility of the SBP. In the year 1998 it was facing an acute shortage of liquidity and thus was instructed by SBP to inject fresh liquidity. Tola, being the Financial Controller of the time, reported to SBP that a subordinated loan of Rs. 200 million had been received from an LTV Consortium (which included various companies). Accounts of BEL reflected that the amount had been received and this development was also reported to the shareholders of BEL. SBP conducted an inspection of BEL for the period 30-6-1998 to 31-3-1999 and concluded that the Rs. 200 million had not been injected as claimed by the company. In fact, SBP's view was that the management of BEL had since 1997, window dressed, in fact, falsely reported its liquidity position.

4. On 18-8-1998, Rauf Kadri had written to the SBP informing it that a subordinated loan of Rs. 200 million was being arranged by the individual sponsors of the LTV Consortium and that though the same had been delayed he was optimistic that the money will be arranged by the end of August 1998. He therefore requested for time to finalize the arrangements. SBP in reply vide its letter dated 29-8-1998 advised Rauf Kadri that the money should be injected by the end of September.

5. Tola joined BEL as SEVP on 1-1-1998 and on 27-10-1998 he took over the charge as SEVP Central Accounts. Tola's role in the alleged misrepresentation to SBP is prima facie confined to writing a letter on 2-11-1998 confirming that an amount of Rs. 200 million had been received by BEL from the LTV Consortium. This according to SBP was not the correct position. The letter Tola wrote, on behalf of BEL, was as follows: Dear Sir Approval of Subordinated Loan Agreement With reference to our previous communication regarding aforementioned caption. We are enclosing copy of Subordinated Loan Agreement duly signed by Mr. Rauf B. Kadri, for and on behalf of LTV Consortium. We confirm to you earlier that we have already received this amount and are classifying this Sub-Ordinate Loan in NBFI reporting and we request you to exempt from SLR requirements. Please accord your approval on the basis of enclosed copy with or without modification. Thanks and regards

6. Tola's learned counsel has argued that a proper appreciation of the relevant facts in juxtaposition to the documents provided by the complainant will prove that the applicant is innocent; that the requirement of mens rea in the allegations against the applicant is missing thus no criminal case is made out; that in order for the proceedings to continue permission of a Company Judge was to be sought which had not been done in the present case; that there was mala fide on the part of SBP officials.

7. Learned counsel for the SBP has argued that documentary evidence will prove that misrepresentation had been made to by the accused in his capacity as head of the finance department; that section 561-A, Cr.P.C. could not be invoked as it would tantamount to stifling the prosecution; that the section 561-A, Cr.P.C. application in itself shows that the matter cannot be decided without evidence being led; the absence or otherwise of mensrea cannot be decided arbitrarily.

8. Tola's involvement, if any, in the alleged misreporting, can only be determined after evidence is led at trial. Prima facie it appears from a tentative assessment of the record shown to me that BEL was short on its liquidity requirement and that after some correspondence with the SBP, in which several promises and representations were made by BEL officials, particularly Rauf Kadri, BEL, of whom Tola was the finance head at that time, confirmed in writing that the subordinated loan had been received and the same was also reflected in BEL's financial statement. This turned out to be wrong. Tola does have a case to answer and the charge is not groundless nor is it certain that a conviction cannot take place. Whether there was mens rea or not, as argued by learned counsel, can also be determined only after analyzing the evidence available. Notwithstanding the foregoing, while neither counsel has raised this ground, I am of the view that when on 7-9-1999, a learned Single Judge after holding a hearing has already ordered that a triable case has been made out and that a charge should be framed, it is not open to me as a Single Judge to sit over the order of a Single Judge. Therefore I do not have jurisdiction to adjudicate a plea for quashing proceedings.

9. In view of the above the application stands dismissed. It appears that documents have already been supplied to the accused earlier hence let the charge against the accused be framed. Re-list in the first week of March. SA/S-22/Sindh Application dismissed.